Key Takeaways
How has whale activity influenced short-term market sentiment?
Whale investors offloading 900,000 XRP have amplified bearish pressure, pushing the price towards a crucial demand zone.
What do Open Interest, liquidation data reveal about XRP’s next move?
A 15.73% drop in Open Interest and dense liquidation clusters at $2.2 highlighted volatility risks and uncertainty.
XRP whale investors have offloaded 900,000 XRP within just five days, stirring renewed bearish sentiment across the market. This surge in selling activity coincided with declining Open Interest and weakening technical signals – A sign of growing caution among traders.
With XRP now hovering near a key support zone, traders are questioning whether this sell-off marks the beginning of a larger downside phase or merely a short-term correction.
Looking at key demand zones as bears tighten control
At press time, XRP’s price was hovering within the crucial demand zone between $2.20 and $2.30 – An area that has historically provided a solid foundation for accumulation and rebounds. However, the recent pattern of lower highs seemed to reinforce the dominance of bears, suggesting that downward pressure may be intact.
The price action also revealed repeated rejections from a descending resistance trendline, preventing any meaningful breakout attempts.
Meanwhile, the RSI’s reading of 35.22 hinted at waning momentum, while also alluding to near-oversold conditions that could soon invite buyers.
Supporting this outlook, the DMI’s -DI at 36.38 seemed to surpass the +DI at 13.13. A strong ADX at 39.19 highlighted clear bearish control and sustained trend strength too.
Source: TradingView
Leverage appetite fades as Open Interest falls by 15.73%
The derivatives market has seen a notable contraction in participation, with the Open Interest falling by 15.73% to $3.52 billion. This decline could be a sign of the market’s cautious tone as traders unwind leveraged positions amid heightened volatility.
Such a sharp reduction in Open Interest typically indicates risk aversion. Especially after significant liquidations or abrupt price swings.
However, while this moderation in leverage can stabilize short-term volatility, it also reflects weakening market conviction as participants refrain from aggressive directional bets.
The fading enthusiasm in derivatives seemed to be in line with the broader decline in whale accumulation. This might be confirmation of a broader cooling phase for XRP’s speculative momentum.
That being said, it’s worth pointing out that leverage can also set the stage for cleaner, more organic price moves in the sessions ahead.
$2.3 and $2.2 – A volatility trigger zone?
Coinglass’s heatmap data revealed concentrated liquidation zones near the $2.30 and $2.20 zones, signaling key battleground levels for traders. These dense liquidation clusters indicate where leveraged positions are most vulnerable, often serving as flashpoints for sudden volatility.
Therefore, if XRP breaks below $2.2, cascading liquidations could intensify the sell-off, amplifying downward momentum through forced exits.
Conversely, a strong defense at these levels could trigger short squeezes as traders rush to close bearish positions, propelling prices upwards.
This tug-of-war dynamic suggested that XRP’s next decisive move will likely emerge from reactions within this liquidity pocket. This would make $2.20–$2.30 the most critical area for market direction in the near term.
Can bulls defend the $2.2-zone and reverse momentum?
At press time, the confluence of whale selling, bearish technicals, falling Open Interest, and rising liquidation pressure appeared to paint a cautious short-term outlook for XRP.
Bulls now face a crucial test around $2.2, where defending this zone could spark renewed accumulation and short-term relief.
On the contrary, if sellers sustain pressure below this threshold, XRP risks extending its decline. This could potentially invite a deeper retracement before any meaningful recovery unfolds.
